teachermike
New member
You can check my previous post where I was trying to find the best option to maximize my money on the long run.
I spent some time and did the math... and it was not what I expected! I figured I'd make a new post instead of editing because there is a lot of new info.
I used an annual depreciation of 14%, which seems to be the case for EVs, with the initial resale value set at the purchase price, but without subsidies, and without taxes. At 12% annual depreciation or lower, the purchase option starts becoming more favourable again, though, if I maintain the interest rate.
I used an expected return on my investments of only 5%. Higher interest rates would favour leasing even more.
This analysis holds if you are planning on always driving a new car, i.e. if you sell the car at the end of the equivalent lease period. If you are planning on holding the car for its full lifespan, then you already lose out if you lease your second car.
If you are planning on keeping the car for a long time, purchasing after leasing doesn't make any sense at all.
These scenarios hold for individuals. It's different if you can write off expenses as a company or if your car is a business expense. They also need to be rerun if the financing, leasing, or interest rates change, or if depreciation improves significantly.
I spent some time and did the math... and it was not what I expected! I figured I'd make a new post instead of editing because there is a lot of new info.
I used an annual depreciation of 14%, which seems to be the case for EVs, with the initial resale value set at the purchase price, but without subsidies, and without taxes. At 12% annual depreciation or lower, the purchase option starts becoming more favourable again, though, if I maintain the interest rate.
I used an expected return on my investments of only 5%. Higher interest rates would favour leasing even more.
This analysis holds if you are planning on always driving a new car, i.e. if you sell the car at the end of the equivalent lease period. If you are planning on holding the car for its full lifespan, then you already lose out if you lease your second car.
If you are planning on keeping the car for a long time, purchasing after leasing doesn't make any sense at all.
These scenarios hold for individuals. It's different if you can write off expenses as a company or if your car is a business expense. They also need to be rerun if the financing, leasing, or interest rates change, or if depreciation improves significantly.